Sunday, March 15, 2009

Mistakes of the Past?

While studying the history of Thoroughbred racing I came upon an interesting comparison of the market as it is now and how it was a hundred and seventy years ago.

In the late 1820 to early 1830’s speculative fever reached a high point across America the prices of everything soared and money poured into businesses across the nation from the coffers of banks and individual investors.

Horse breeders borrowed heavily from banks and investors to expand their acreage and stables. They brought in so much money from selling each crop of horses that every year they doubled and tripled the number of foals they produced.

However when the economy collapsed in 1837 breeders found themselves trapped with an oversupply of a product no longer in demand. The effect within the industry was predictable as across the board prices plummeted and the business of selling horses took a nose dive.

Although by no means is the Thoroughbred industry the only business which has replicated errors of the past, just look at the daily bail outs to prove that, but the comparison is eerily similar and illustrates well the old saying that “if you don’t heed the mistakes of the past you are bound to repeat them”.

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